A group of 13 financial institutions, including Deutsche Börse, ICAP, JP Morgan and the Depository Trust & Clearing Corporation, have backed the blockchain startup led by former JP Morgan commodities chief Blythe Masters.

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Blythe Masters,speaking at the 2015 Bloomberg Markets Most Influential Summit

New York-based Digital Asset Holdings has raised more than $50 million from investors, which also include ABN Amro, Accenture, ASX Limited, BNP Paribas, Broadridge Financial Solutions, Citi, CME Ventures, Santander InnoVentures, and The PNC Financial Services Group, it revealed in a statement on January 21.

This marks the latest collaborative effort by large financial institutions in what has become one of the most talked about topics in financial technology.

Michael Bodson, the chief executive of post trade services provider DTCC, told Financial News that his company had been experimenting with blockchain since early last year and decided to back Digital Asset because its “knowledge base and their areas of focus were more mutually aligned with ours”.

He said: "We see there could be some major potential to create efficiencies through this technology [blockchain].

"But there is still a lot that has to get done in terms of understanding exactly how it is going to work."

Founded in 2014, Digital Asset builds software that uses distributed ledgers, including blockchain – the underlying technology behind cryptocurrency bitcoin – to settle trades made in mainstream financial assets, as well as digital assets.

Its goal is to use distributed ledgers to reduce counterparty risk and make settlement faster, cheaper and more secure.

Masters, chief executive of Digital Asset, said in the statement:“These investments represent a tremendous endorsement of Digital Asset from banks, exchanges, settlement and clearing firms, central securities depositories, and market infrastructure and professional services providers.”

Masters, widely-regarded as one of the most influential women on Wall Street, spent almost three decades at JP Morgan where she helped pioneer the creation of credit default swaps. She left the bank in 2014 after the sale of its physical commodities arm to Swiss trading firm Mercuria and joined Digital Asset in March of 2015.

The company has been very acquisitive under Masters' leadership. In June it bought blockchain startup competitors Hyperledger and Bits of Proof, and in October acquired Blockstack.

The Digital Asset investment underscores Wall Street’s growing interest in the blockchain, a technology that many have come to believe could help reduce back-office costs and simplify trade processes.

Blockchain is a distributed ledger of transactions that is maintained by a network of computers online. Financial assets, such as stocks and bonds, have the potential to be turned into code and transferred via the blockchain, without the need for intermediaries

While it is still early days for the technology, some analysts believe it has the potential to transform business models across financial markets. In a report released in December 2015, consultancy McKinsey & Co argued that custodians, clearing houses and messaging networks all face possible revenue reductions from the advance of blockchains.

Bodson said: “The roles of infrastructures will evolve but there still will be roles for us to play.”

He said there is a need for shared standards and protocols in order for the technology to evolve efficiently, and said DTCC would “envision itself” potentially running a blockchain-based system for the industry in the future.

“Now nobody has anointed us with that position so we can't say we would automatically be the people playing that role. So that is why I think it's important for us to get involved in this technology early,” he said.